Investor's Business Daily has an interesting report
out today suggesting congressional Democrats may attempt to simultaneously crack
down on major financial institutions and protect school
districts budgets nationwide.
According to the piece, lawmakers are working to include two Wall Street tax changes in their push for financial
reform: the bank tax President Obama proposed in January and an end to the "carried interest" loophole
that hedge fund and private equity managers have enjoyed for far too long. Much of the new revenue would reportedly be directed at state governments in the form of education
assistance, thus preventing schools districts from falling off a
revenue cliff in 2011.
If this ultimately happens, it would be great news for all the Illinois teachers and administrators currently facing layoffs and program cuts -- not to mention the students. At the same time, it could negate Gov. Quinn's narrow strategy of tying a one-percentage-point income tax increase to education funding. Too bad he didn't choose to put his weight behind a more comprehensive proposal.
Responding to the growing anger at the banking industry, one Illinois lawmaker proposes that state take its investment dollars out of Wall Street and go it alone.
Just hours after Alexi Giannoulias blasted
Rep. Mark Kirk for taking $54,010 from employees of Goldman Sachs, the Kirk campaign said it
plans to return those donations.
With the health care debate behind him, Rep. Peter Roskam is turning his attention to financial reform. Joined by House Minority Whip Eric Cantor (R-VA) on WFLD's Good Day Chicago this morning, the suburban Republican blasted the Democratic proposal currently being debated in the Senate. "When you really ... distill it down," Roskam says, "it's another bailout." Watch below (the full clip is available here):
Like his GOP colleague Mark Kirk, Roskam has clearly been pouring over the memos supplied to the Republican caucus by conservative pollster Frank Luntz. Back in January, Luntzadvised the minority party to defend Wall Street from new
regulation by characterizing all financial reform efforts as leading
to "endless bailouts." Of course, this is patently absurd. The entire animus
behind the financial reform push, aside from protecting consumers, is
to prevent the need for further bailouts.
But hey, it makes for a good talking
point -- one that Roskam (who raised $553,000 from the finance, insurance, and real estate industries in 2008) seems eager to deploy. Unfortunately, the Fox Chicago hosts weren't equipped to rebut it.
If you haven't already, be sure to listen to the latest episode of WBEZ's This American Life. The bulk of the show is devoted to a report by ProPublica and the crack Planet Money team on a Chicago-based hedge fund called Magnetar. It appears that the strategy employed by this fund -- "sponsor[ing] the creation of complicated and ultimately toxic financial
securities... while at the same time betting against the very
securities it helped create" -- made the financial crisis much worse than it would have otherwise been.
The family bank of U.S. Senate candidate Alexi Giannoulias loaned a
pair of Chicago crime figures about $20 million during a 14-month
period when Giannoulias served as a senior loan officer, according to a
Tribune examination. Broadway Bank is now suing the pair to
recover millions in delinquent loans. In a written statement,
Giannoulias said he did not play a central role in the loan process.
Health care wasn't the only winner in last night's historic vote reform vote. In companion legislation, Congress is poised to reform the student loan
industry, which will ultimately free up billions in additional college aid for needy
Illinois students.
Ald. Ray Suarez (31st Ward) and State Sen. Iris Martinez (D-Chicago) called a joint meeting in Chicago on Monday to pressure the banks to
do a better job maintaining foreclosed properties and to speed up the unduly slow modification process to keep more people in their homes.
We've written repeatedly about payday lenders' efforts -- in both Springfield and D.C. -- to block legislative iniatives aimed at reining in their industry's exorbitant interest rates. It turns out the lenders are also lobbying aggressively on Capitol HIll to thwart provisions in the proposed Consumer Financial Protection Act that would better regulate the predatory loans. TPM reported this week that Check Into Cash CEO W. Allan Jones has been instrumental in convincing Sen. Bob Corker (R-TN) to intervene. In case you were wondering, Illinois and surrounding states are home to hundreds of Check Into Cash outlets.
